Given that lobbying activity by audit firms constitutes a potential advocacy threat to auditor independence, this paper seeks to provide an economic rationale for audit firm lobbying behavior. Specifically, I examine whether federal lobbying activity by audit firms contributes to their ability to retain existing clients and attract new clients. Consequently, I predict and find that greater lobbying activity is associated with a lower probability of auditor switching behavior as well longer auditor tenure when the client is in an industry with high interest in lobbying.
Download count: 0
- Doctoral Dissertation Accountancy 2017